Probate Court Fees increase on hold… for now

5 April, 2017

Earlier this year we reported the response from the Ministry of Justice to the Probate Fee consultation held last year. It would seem that these are, currently, shelved, writes Louise Eccleston, Storrar Cowdry’s Head of Private Client.

Despite overwhelming opposition to the proposed probate fee changes, the MOJ decided to proceed with the proposals, which in effect charged the court fees on a scale basis rather than reflecting the work being undertaken by the Probate Registry.

The changes were due to be brought in from “May 2017”. We were waiting for a Statutory Instrument to confirm the exact date. We have received a number of enquiries from clients concerned about these changes and the impact of these on their family’s inheritance, in many cases in addition to the Inheritance Tax payments. The current fee is £155 where a solicitor applies, the new fees were to be as follows:

Value

Fee

Estates of up to £50,000

£0

£50,000 to £300,000

£300

£300,000 to £500,000

£1,000

£500,000 to £1,000,000

£4,000

£1,000,000 to £1,600,000

£8,000

£1,600,000 to £2,000,000

£12,000

£2,000,000 or more

£20,000

The Committee scrutinizing the Statutory Instrument has rejected the proposed changes on the basis that both Houses of Parliament must consider them – so the plans are on hold, for now.

The Committee report states:
“The Committee asked the Ministry of Justice a number of questions so as to probe whether the Lord Chancellor… would, in substance, be imposing a tax on estates rather than prescribing probate fees.

“The Committee has a real doubt as to whether the Lord Chancellor may use a power to prescribe non-contentious probate fees for the purpose of funding services which executors do not seek to use – namely those provided by courts and tribunals dealing with litigation. Applying for probate is not to be compared with the commencement of proceedings. A person can choose whether to litigate, and therefore whether to incur the fees payable on issuing a claim – which may be recoverable from the defendant if the case succeeds. In contrast, executors have to obtain probate to allow them to administer an estate, and the fee for doing so is not refundable. This is an administrative process, akin to the registration of a life event. Nobody applying for an uncontested probate would think for a moment that they were engaging in litigation. That makes it difficult for the Committee to accept that a power to charge enhanced court fees can be extended naturally to require probate fees to reflect the general costs of the court and tribunal system.

“The charges provided for …. appear to the Committee to have the hallmarks of taxes rather than fees, … the scale of the proposed increases (from £155 to as much as £20,000 – a rise of nearly 13,000%) – and because the charges are disproportionate to the service provided by the Probate Registry.”

Therefore, for the moment the proposals are on the shelf. We will watch carefully to see if the Parliament agrees to them.

UPDATE:

We were pleased to hear, at the beginning of April, that the Ministry of Justice had failed to persuade a Parliamentary Committee that the Probate fee increase could go through quickly. The committee commented this was tantamount to taxation and therefore, referred this back to Parliament.

When the Prime Minister called the General Election there was no longer sufficient Parliamentary time to get this through, as Parliament was dissolved on 2nd May.

The fee increase has only been “shelved” due to the lack of Parliamentary time. The Ministry of Justice has suggested that these proposals may continue after the election, but this is yet to be confirmed.

Whilst there was much publicity to say that this planned increase was “scrapped ahead of the election”, our view is that there is still likely to be a Probate fee increase, later this year, but we hope it will not be as drastic as originally proposed.